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A vote rejected by the authority

A vote rejected by the authority
A vote on $100m in rescue funding for troubled Israeli container line Zim Integrated Shipping Services was rejected by the Israel Securities Authority.

A vote on $100m in rescue funding for troubled Israeli container line Zim Integrated Shipping Services was rejected by the Israel Securities Authority.

A vote on $100m in rescue funding for troubled Israeli container line Zim Integrated Shipping Services was rejected by the Israel Securities Authority on the grounds that Bank Leumi, which was in favour of the funding, was not eligible to vote.

The Israeli securities authority said there were not enough remaining minority shareholders to pass the vote.

Bank Leumi is a key minority shareholder in Zim"s owner, Israel Corp.

Zim could not be reached for comment at press time.

The drama affecting Zim has dragged on for five days since the Israel SEC ruled previously that the bank was not eligible to vote for bailout package because of its position as a lender to Zim.

The bank is the largest minority shareholder of Israel Corp, holding 18% of the stock, and has loans of $10m outstanding to the container line.

But the bank voted anyway, leading to a debate by remaining minority holders over who would be allowed to decide the vote. A full 54.2% of Israel Corp is owned by vehicles owned by the Ofer family.

The capital injection was part of a broader plan to pump $350m into Zim, a victim of the global downturn in the container market. At least one-third of minority voters are required to vote in favour for the $100m to be released.

Analysts have repeatedly expressed frustration over the lack of information offered by Israel Corp over the Zim restructuring plan, which was announced on August 2.

?I don"t think [Israel Corp] can stick with this situation ? not saying anything ? for much longer,? said Yoav Burgan, an analyst with Leader, an investment house in Tel Aviv. ?It doesn"t make sense.?

At the time, Israel Corp announced a deal that would allow deferrals on ships that Zim had on order and, in some cases, help with financing.

It also outlined a plan to offer convertible shares to shipowners doing business with Zim in an exchange in reduction of charter rates, but the rate of conversion for the shares was not included ? making the true value of the offer hard to glean.

www.TurkishMaritime.com.tr

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